The study introduces new preferences that help explain asset prices by separating long-term and short-term risks. The results suggest that these preferences can explain asset prices with low risk aversion and low intertemporal substitution. Specifically, the model shows that a low relative risk aversion of 9.8 and a low intertemporal elasticity of substitution of 0.11 can explain asset prices. Additionally, the preferences allow a standard economic model to match the equity premium, bond premium, and risk-free rate puzzle with a low intertemporal elasticity of substitution of 0.07 and a low relative risk aversion of 5.