The S&P 500 is certainly more diversified than individual stocks. But it's still only the largest US companies. By itself, it's only a somewhat diversified portfolio.

There are plenty of other index funds for whatever floats your boat. Even real estate funds. There's no problem being diversified.

Unless of course you invested in 2016 and it's Mar 2020 and it turns out you need the money now. You'll have no gain and fours years lost.

Diversification: It's All About (Asset) Class

https://www.investopedia.com/articles/financial-theory/08/as...