[Question] Are index funds still a good investment?

I don’t really follow the investment scene, but from people who do, I had gotten the impression that index funds are generally the best bet for a lazy investor. So late last year I started regularly putting some money in them. Now some of my more finance-savvy friends are saying that index funds might be in a bubble, with so much money going into them that their stocks are likely to be overvalued.

This page seemed to have a reasonable overview of the debate; one of the counterarguments that sounded the most plausible to me was that active traders are still making the majority of trades, so if index funds were overvalued, the active traders should make a killing on that inefficiency. But I don’t think I really understand this domain well enough to evaluate that, and at least one of my friends who’s better informed than me seems to think that the bubble is an issue.

(Additional question: if index funds aren’t a good investment anymore, what is?)