I’ve also seen a variation of this that gives different weights to positive and negative votes, the theory being that the likelyhood of you actually voting when you like/don’t like isn’t the same.
Yes, Vanguard is way ahead in this. However, if you’re not American, it’s not always the best choice, as your returns may be lower because of tax issues.
The timing is crucial. You say “until you either buy a house or retire”. I’m not sure how long you have until you retire, but it’s 5 years if you buy the house. 5 years is not a long time.
Even if you start index investing at a market top, you’ll probably do well over longer timeframes, but may do poorly in short intervals.