Oh I agree. They're a good deal considering the alternatives but they also carry a lot of risk. Less risk than individual stocks of even specialized baskets but a lot of people throw the term around as if its magic. Several source I've read also assume that you'll constantly be putting money into the market and never withdrawing it to actually buy that house you start this whole thing for. Withdrawing the money means your rate of return depends on which cycle the market is in when you do it and to get the best rate, you need to withdraw when its peaking. That's timing the market. That's misleading...

But overall, I agree with your analysis. It's a great vehicle for people who either lack the time or knowledge required for investing. If you decide that stock investment is the best way forward for you...