Typically, money is managed and invested in your home country. However, for many investors, this home country bias can exclude them from global opportunities that can boost long-term returns and reduce risk.
A quick side-note: If you're investing for 3 to 5 years, this probably doesn't apply to you. The types of funds that would protect your capital from market ups and downs, while generating smaller returns, are domestic bond funds that invest in treasury securities, money markets, and even a CD account.
For US listeners, I recommend visiting investor.gov and search "income", you'll find a list of resources to help you. For listeners outside of the US, there should be similar websites that offer investor education that are directly from independent government agencies. For example, in Europe, there is the European Investment Authority (ESMA) which has an investor corner, and in Australia, there's the Australian Securities and Investment Commission (ASIC).
For long-term investors, global diversification matters. Why? Well here's an interesting stat: The US represents 70% of the MSCI World Index (a global benchmark), but a quarter of global GDP. On the other hand, China represents 16% of the global GDP and less than 1% of the World Index. This creates a lot of opportunities for investors to gain exposure to global growth that's currently unaccounted for in the traditional 60/40 mix.
Studies have shown that the max drawdown (percentage decline from peak performance to trough) of just holding stocks is 80% versus 50% for a 60/40 blend of stocks and bonds and around 40% for just bonds. But the return potential is likely to decline for the stock side of the portfolio that's concentrated in the US.
Currently, US valuations (price relative to earnings) are above historical averages. This means that US markets are nearing extremes last seen before corrections such as the dot-com bubble in the 90s and the 2008 recession. Meanwhile, valuation levels are really low for international countries relative to the US such as Europe, Japan, and emerging markets.
So, why overpay for stocks, when historically, high valuation levels lead to low returns of around 2% to 4% (and in some cases negative). You shouldn't prepare yourself for bond-like returns when you're looking for growth at a reasonable price over the long-term.
The allocation is actually pretty simple. Assuming you're based in the US, you'd want ½ US and ½ non-US. The US side should have an allocation to large-caps and small-caps (big and small companies), while the international side can hold foreign developed markets such as Europe and Japan and foreign emerging markets such as China and Brazil. Bonds can be a mix of US corporate bonds, government Treasury bonds, and foreign sovereign bonds. Additionally, you can hedge inflation (the risk of rising prices and slower economic growth that can weigh on stock performance) by holding commodities, gold, real estate, and treasury inflation-protected securities (TIPS).