I remember that in the year or two leading up to the market meltdown in 2008-2009, no less than Jack Bogle sounded the alarm that financial service and banking companies took up too large a percentage of the market equity for what they did, being basically middle men. I do not remember the exact percentage at that point but perhaps it was more than 20%.
If you put fresh money to the market at that point, a larger percentage of your money goes to buy those frothy financial companies. The same thing happened in 2000, but with tech stocks taking the center stage.
Of course worse than indexing at these moments were MFs who loaded up on the hot stocks, and boasted of beating the index. Only the contrarian investors are not guilty of feeding the frenzy.