The ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) has fallen below 6,000 again after spending three months above the important psychological level.
The 6,000 mark is so important because it took the ASX almost 10 years to get back up to that level after the GFC.
Today, the All Ords Index has plunged by over 3.6% to finish just below the 5,900 level.
Of course, a lot of the index's return is influenced by the big four banks, BHP Billiton Limited (ASX: BHP) and CSL Limited (ASX: CSL).
Will it be another decade before the index rises above 6,000 again?
I don't think it will be a decade, but it could be a while.
In-fact, I think investors prematurely sent the index above 6,000 as there are a lot of reasons to be negative about the Australian economy at the moment. Retail sales are falling, households are the most indebted they've ever been, house prices are falling and the RBA doesn't dare to increase the interest rate because inflation and growth is so low.
I'd be worried if most of my portfolio were focused on the top end of the Australian share market, which most index funds, SMSF portfolios and listed investment company (LIC) portfolios are.
However, my portfolio is not focused on Australia's big blue chips. It is focused on smaller blue chips, mid cap and small cap stocks which will hopefully continue growing earnings regardless of what the economy or share market does. That's why I'm a shareholder of businesses like National Veterinary Care Ltd (ASX: NVL), Ramsay Health Care Limited (ASX: RHC), Altium Limited (ASX: ALU) and InvoCare Limited (ASX: IVC).
Foolish takeaway
The ASX is still higher than it was four months ago, which doesn't include the added benefit of dividends. I think this correction is needed as a lot of valuations were getting far too high, particularly in the USA. For me, it's a buying opportunity.
