Silver Is Obliterating the Stock Market in 2025 With a 168% Return. Here's a Simple Way to Buy It for 2026

Gold has increased in value by 72% in 2025, crushing major stock market indexes like the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq-100. It has even outperformed shares of artificial intelligence (AI) powerhouse Nvidia. Elevated inflation, soaring government debt, and heightened economic uncertainty are just a few factors pushing the yellow metal higher.

Gold's close sibling, silver, is doing even better, with a whopping 168% gain this year. It's benefiting from the same tailwinds, but a supply shortage is acting like rocket fuel for this rally. Could 2026 bring further gains? I'll explore that possibility below, and give investors a simple way to buy the precious metal with minimal fuss.

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Why silver is soaring right now

Gold has been a widely recognized store of value for thousands of years, mainly because it's extremely scarce, with just 216,265 tons pulled out of the ground throughout all of human history. Silver is also a precious metal but it's far more abundant, with miners extracting roughly eight times more of it each year compared to gold.

But on the flipside, silver is also far more useful in industrial settings thanks to its high electrical conductivity and its much lower cost per ounce. In fact, demand from electronics manufacturers alone soaks up almost half of all available supply each year. That's why a shortage of this precious metal can drive a sharp increase in price in a very short period of time, which is part of the reason for its fierce rally in 2025.

China, which is the world's second largest exporter of silver behind Hong Kong, recently announced new restrictions on shipping silver out of the country starting from Jan. 1, 2026. As the biggest manufacturer of electronics on the planet, China is trying to protect its domestic supply chain, but the restrictions also create leverage in global trade negotiations with other economic powerhouses like the U.S.

But silver was already trending higher this year before China announced the export curbs. It was benefiting from the same political and economic uncertainty fueling gold's powerful rally.

For example, the U.S. national debt recently hit a record high of $38.5 trillion, following a $1.8 trillion government budget deficit in fiscal 2025 (ended Sept. 30). Investors are worried the government can only escape this fiscal mess by aggressively increasing money supply to devalue the U.S. dollar, so they are flocking to precious metals as a hedge.

Can silver's incredible rally continue?

The U.S. government is on track for another trillion-dollar deficit in fiscal 2026, so if China's export restrictions remain active, all of the ingredients will be in place for further upside in the price of silver next year.

However, investors who expect silver to more than double in value again in 2026 might want to temper their expectations. The precious metal has delivered a compound annual return of just 5.9% over the last 50 years, which is probably a more realistic target. Anything above that baseline would be a bonus.

Plus, while silver has generally trended higher over the long term, it's far more volatile than gold. It reached a high of $35 per ounce in 1980 before losing 90% of its peak value, and it then took a whole 31 years before it set a new record price of $48 in 2011. But a 70% decline also followed that bull run, so silver's latest journey to a new all-time high in 2025 was 14 years in the making.

Simply put, investors who plan to add silver to their portfolios in 2026 need to maintain a very long-term time horizon if they want to maximize their odds of earning a positive return.

A simple way to buy silver for 2026

Buying physical silver is the surest way to profit from the precious metal's potential upside over the long term, but it also comes with storage and insurance costs. Plus, it isn't easy to sell silver bars or coins in a hurry. Silver exchange-traded funds (ETFs), on the other hand, can be bought and sold instantly with the click of a mouse, and they don't take up any space.

The iShares Silver Trust (NYSEMKT: SLV) is the biggest ETF in the industry with $38 billion in assets under management, which is fully backed by 528 million ounces of physical reserves. Investors aren't entitled to take delivery of any actual metal, but owning this ETF gives them direct exposure to silver's potential upside all the same.

The ETF has an expense ratio of 0.5%, which is the proportion of the fund deducted each year to cover management costs. That means an investment of $10,000 would incur an annual fee of $50, but that's probably still cheaper than paying to store and insure physical metal.

In summary, buying the iShares Silver Trust is the simplest way for the average investor to add silver to their portfolio.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.