As Bob Dylan sang: “Chaos is a friend of mine.”

It’s time for chaos investing, by which you pick sectors that tend to thrive under uncertainty. Below, I’ll explain how widening disorder will prove beneficial for aerospace/defense and crude oil.

Market volatility is back with a vengeance. Sure, options traders love volatility, but it causes agita for average individual investors.

The stock market lately has been manically reflexive to each whiff of good or bad news, whether it’s about Afghanistan, inflation, interest rates, or the coronavirus. That’s a warning sign. Healthy markets take the stairs; worried markets use the elevator.

Crude oil prices are a reliable barometer of market sentiment. A major source of oil patch anxiety is the rapid disintegration of the Afghan government, as the Taliban seizes the country’s capital of Kabul.

The chaos wrought by America’s withdrawal from its 20-year conflict in Afghanistan could destabilize the entire region, which is home to major oil producing countries. Disruption of supply could provide a tailwind for oil prices, which have been slumping in recent weeks due to worries that COVID will dampen economic growth (see chart).

Bearish sentiment is spreading in the energy sector. But as ever, I’m a contrarian. I expect oil prices to soon bounce back, which makes many battered energy-related investments bargains right now.

My view is that global crude oil prices are undergoing a short-term down cycle before confidence revives and, by extension, per-barrel prices. With OPEC+ maintaining a tight grip on production and demand recovering close to pre-pandemic levels, it would take draconian implementation of business lockdowns (unlikely) and a massive spike in global COVID infection rates (also unlikely) to foster a protracted decline in oil prices. Crude supply remains in deficit and the oil ministers of OPEC+ will make sure it stays there.

What’s more, major military operations (such as America’s removal of troops and material from Afghanistan) have historically coincided with spikes in the price of oil. Moving thousands of troops requires the consumption of oil and gasoline…lots of it. Instability near the Middle East also tends to create uptrends in oil prices.

An astute reading of modern history will reveal that many battle campaigns were predicated on seizing oil fields. An army doesn’t just move on its stomach. It also moves on oil and without it, the battle is lost (Field Marshal Rommel could have told you that).

The supply and demand equation comes into play, of course. Inventories are getting tighter. The U.S. Energy Information Administration (EIA) reported a comparatively large inventory draw of 3.2 million barrels for the week ending August 13. Analysts had expected an inventory draw of 1.26 million barrels for the period. This compared with a considerably smaller draw of 400,000 barrels for the previous week.

Worries about COVID Delta and its deleterious effect on global economies have been weighing on crude oil prices. China this week released weaker than expected factory output and retail sales.

The U.S. also reported weaker retail sales growth for July, but factory output grew, which boosted the dollar, which typically exerts an adverse impact on crude prices. But I think the table has been set for a bounce-back in crude, especially with the economic recovery still on track.

There goes the neighborhood…

Countries in the vicinity of Afghanistan are extremely wary of the Taliban’s return to power. As Kabul falls, defense spending among America and its allies will rise.

A major beneficiary of the chaos in Kabul is the aerospace/defense industry. In particular, drone makers are reporting increased orders from the Pentagon in the wake of America’s departure from Afghanistan.

One of the surest ways to build wealth is to pinpoint unstoppable trends that will unfold for years to come, regardless of economic ups and downs. One such trend is increasing military and commercial demand for pilot-less drones.

Drones have become omnipresent on the 21st century battlefield. Now that U.S. troops have withdrawn from Afghanistan, the Pentagon will continue to patrol Afghanistan’s skies with armed drones. The rapid ascendancy of the Taliban in the vacuum left by American troops makes drones all the more imperative.

Read This Story: Military Spending: A Sure-Fire Biden Play

Geopolitical risk is positive for military contractors, but it tends to unnerve the rest of Wall Street. On Wednesday, the Dow Jones Industrial Average fell 382.59 points (-1.08%), the S&P 500 declined 47.81 points (1.07%), and the tech-heavy NASDAQ dropped 130.27 points (-0.89%).

Also weighing on markets are the latest Federal Reserve minutes from its July meeting, released Wednesday, which showed the Fed discussing the possibility of reducing its bond buying program this year. In pre-market futures contracts Thursday, U.S. stocks were extending their losses. Global stocks were trading lower as well.

It’s a widely held misconception that Democratic presidents starve the military. However, defense spending is one of the rare items that enjoys bipartisan support on Capitol Hill. You can expect Pentagon funding to continue rising under a Biden presidency.

Take it from me, who once served in Congress as a staffer: When Pentagon generals ask for more money, they’re unaccustomed to hearing the word “no.”

The upshot: Crude oil producers and the purveyors of weapons systems are poised for windfalls. Chaos is their friend. It can be yours, too.

Sleep-well-at-night stocks…

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John Persinos is the editorial director of Investing Daily. Send your questions or comments to mailbag@investingdaily.com. To subscribe to John’s video channel, click here.