This last decade has been a brutal ride for many exchange traded fund (ETF) and stock investors. But it’s also rife with lessons worth learning.

This decade might be lost in dollar terms, but in educational terms, it’s plenty rich. Christopher Davis for Morningstar points out some lessons:

• Lesson One. The long haul of recovery may be longer than everyone is anticipating. Stocks may have earned around 7%-10% a year, but that’s usually when measured over 20- or 30-year increments. Short-term or immediate results are not going to just appear. Investing requires patience and discipline.
• Lesson Two. Diversification is now more important than ever. For example, while most types of equities, commodities, and some bonds were way down during the recent bear market, government bonds came on strong. The case for diversification benefits just got more solid.
• Lesson Three. Dollar-cost-averaging is the practice of making regular investments which helps over-invest in overly hot markets. If you were disciplined and kept investing throughout the 2000 to 2002 bear market, you bought in at cheaper prices and likely have enjoyed a much better return on those investments.
• Lesson Four. The bottom line is that U.S. consumers must change their ways. Save, save, save and but less, even when it comes to the markets.
• Lesson Five. Minimize taxes and expenses. ETFs can help this become a realistic part of your strategy. Although taxes are unavoidable, they can be minimized by investing wisely.
• Lesson Six. The past isn’t always prologue. Just because it happened before doesn’t mean it will happen again. The market often has gone on to periods of outsize gains after long, slow periods. Stick to watching the trends and proceed accordingly.

Tags: ETF 101, Taxes, Trend Following