Silver stocks have been on such an amazing run that it may finally be time to trade in your gold bars for a piece of the much-cheaper (and perhaps more undervalued, at least according to the gold-silver ratio) precious metal. Of course, gold and silver have both been robust additions to diversified TFSA (Tax-Free Savings Account) portfolios over the past year or so. And while gold has drawn most of the attention (it’s a much “prettier” metal for sure), I do think that silver’s quiet surge is worth getting behind, especially given the potential for industrial demand (it’s actually an ingredient in solar panels) to take things up a notch.
Although I’m not a fan of chasing hot stocks, I do think that it’s a much better idea to pick up commodities on strength rather than weakness. Indeed, silver (and other commodities) can go to sleep in a form of hibernation for many, many years. Now that silver has woken up with a huge breakout that’s sent the metal up more than 30% year to date, perhaps it’s no longer gold that shines brightest (gold is up around 26% year to date). In any case, I’m a bigger fan of the silver chart amid this recent melt-up to highs not seen in more than a decade.
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Is silver just getting started?
It’s tough to predict how many legs the great silver surge of 2025 has. Things can reverse course rather quickly, making the asset rather tricky to trade on seasonal strength. That said, for investors looking to enhance their TFSA portfolio’s diversification for the summer, I think silver is a great addition, provided you have realistic expectations about returns going forward.
Indeed, silver’s incredible first half may very well be met by a bit of a hangover that drags well into the winter and the start of 2026. Either way, dollar-cost averaging (DCA) seems to be my preferred way to build a full position over time. That way, if silver starts to sag (it does dip rather violently), you’ll be able to buy more bullion or shares of something like the Sprott Physical Silver Trust (TSX:PSLV) to lower your cost basis.
This silver stock is shining with value
Between bullion and precious metal mining stocks with silver exposure, I’m inclined to go with the former for those looking for less beta. However, for those who want more on the returns front, it’s tough to bet against something like First Majestic Silver (TSX:AG), which is experiencing immense production strength. And, of course, there’s a dividend, but a 0.22% yield isn’t much of a needle-mover for most.
In any case, given the dividend growth potential and an impressive full-year guide that’s in place, I’d certainly not count AG shares out, especially as it looks to make up for lost time by gaining on the back of the recent surge in silver, which I don’t think is yet fully priced into a stock that’s still well off its highs. With as much as 15.8 million ounces of silver expected for the year (and a considerable amount of gold expected as well), AG stock may shape up to be a relative bargain compared to physical bullion.
