Morningstar's Lifetime Allocation Indexes, developed in conjunction with asset-allocation specialist Ibbotson Associates, provide additional intelligence about what's a reasonable foreign/domestic split.
In general, it's worth noting that these benchmarks are much less foreign-stock-heavy than is the case with global market benchmarks such as the FTSE All-World Index. For example, the portfolios geared toward investors who are just starting out steer roughly 40% of their equity assets toward foreign stocks as of this writing, and those weightings step down dramatically for those nearing and in retirement. For people with 10-15 years until retirement, the indexes' foreign stakes compose roughly 30% of the overall equity allocation as of this writing, and drop to 20%-25% of equity for those who are already retired.
One of the key rationales for a lower foreign-stock allocation in retirement is currency risk. Because foreign assets are not denominated in dollars, there's a chance that foreign currencies could dip as an investor approaches retirement, thereby depressing the purchasing power of a heavily globalized portfolio at an inopportune time. Of course, those currency swings can work the other way, too. But the bottom line is that currency risk is a wild card that's completely out of your control, and you're better off reducing any such risks as retirement draws near.
A checkup of target-date funds' average foreign allocations yields weightings that are in a similar range, roughly one third of the overall equity portfolio as of this writing. As is the case with Morningstar's Lifetime Allocation Indexes, foreign stocks consume a larger share (close to 40%) of the equity portfolios for younger investors than is the case for investors closing in on retirement.