You should always compare your rates of return on different types of investments. The advice about index funds is (to my knowledge) primarily rooted in the fact that index funds typically outperform mutual funds, with lower management fees to boot. Not a claim that index funds are the strongest investment.

Also worth noting- can rental properties ever be included in blanket investing advice? Investing directly in property requires either a group of investors or considerable capitol- both, really. Stocks and such are popular in sweeping advice because anybody with two nickels to rub together can acquire stocks.