This study investigates how firm-level political risk influences corporate investment in risky financial assets. Analyzing hand-collected data from annual reports of S&P 1500 non-financial firms over the period of 2009–2022, we find that heightened political risk significantly reduces firms' risky asset holdings, supporting the precautionary motive. Additionally, positive political sentiment and topic-specific uncertainties notably affect the financial investment decisions. Our findings contribute to the literature by explicitly differentiating financial asset types and providing nuanced insights into firm-level political dynamics influencing financial asset allocation.