Even in our gone-fishing portfolios we suggest investing more overseas than in the United States. For most investors, foreign stocks will be their largest and most important allocation. Including the right mix of foreign stocks will help you relax and go fishing no matter which foreign seas are in turmoil.

Creating a gone-fishing portfolio begins with a top-level asset allocation. We generally recommend that the largest allocations consist of foreign stocks. For a typical 40-year-old investor, the percentage in overseas investments would be 36.2%.

The gone-fishing philosophy suggests as few funds as possible to capture the lion’s share of market returns. It also recommends using only funds with low fees and expenses and a large number of holdings to track the index. Although additional holdings might boost returns, the primary goal is simplicity.

For foreign stocks, the first selection should be Vanguard MSCI EAFE ETF (VEA). It uses a passive managed sampling methodology to track the MSCI EAFE Index. EAFE stands for Europe, Australia and the Far East and includes every developed country outside of the United States and Canada.

VEA has an incredibly low expense ratio of 0.12% and includes more than a thousand stocks from more than 20 developed markets. And the annual return for the EAFE Index over the past 10 years has been 5.35% through May 2011 compared with the S&P 500 Index’s 2.64%.

The second addition to your foreign stock holdings should be the Vanguard Emerging Markets ETF (VWO). Its expense ratio is also low at 0.22%, and it includes over 800 holdings in China, Brazil, South Korea, Taiwan, South Africa, Russia, India, Mexico and other countries.

The Emerging Market Index has performed exceptionally well. In the past 12 months it had a 30.41% return. And over the past decade it had an annual return of 16.1%.

If these are your only two holdings, we recommend putting two thirds in VEA and one third in VWO. So if your foreign stock allocation is 36.2%, you would put 24.1% of your total assets in VEA and 12.1% in VWO.

A gone-fishing portfolio is all about simplicity, but foreign investing is the first place I would begin to increase the complexity of your holdings.

Investing in these two funds fails to invest anything in Canada. Our northern neighbor is both a major developed country and also enjoys high economic freedom and a lower debt and deficit. So the next holding to add would be the iShares MSCI Canada Index Fund (EWC). The expense ratio is still a relatively low 0.53%.

Putting perhaps 10% of your foreign stock allocation in EWC would leave 60% for VEA and 30% for VWO. With this allocation you would have every developed and emerging market country outside of the United States. Adding additional holdings serves only to overweight specific styles, sectors or countries that you expect to outperform the EAFE index at the expense of increased complexity.

For example, instead of 60% in VEA, you could try to tilt toward value stocks or smaller stocks by including the iShares MSCI EAFE Value Index ETF (EFV) and Vanguard FTSE All-World ex-US Small Cap Index ETF (VSS). Put 30% in VEA, 15% in EFV and 15% in VSS.

Another adjustment to a gone-fishing portfolio would be to replace much of the EAFE index with countries with higher economic freedom and a lower debt and deficit. Such a change adds a great deal of complexity, but the additional returns are probably worth the complication of more holdings. These countries should outperform their debt-laden counterparts. And most of the iShares country-specific ETFs have low expense ratios of 0.53%.

Canada is one of the countries with the highest economic freedom. The other four are Hong Kong, Singapore, Australia and Switzerland. You can purchase a blend of the first three of these countries in iShares MSCI Pacific ex-Japan ETF (EPP). EPP is 68% Australia, 19% Hong Kong and 13% Singapore. You can also purchase these three holdings individually as iShares MSCI Australia Index ETF (EWA), iShares MSCI Hong Kong Index ETF (EWH) and iShares MSCI Singapore Index ETF (EWS).

For investments in Switzerland, use iShares MSCI Switzerland Index ETF (EWL). And if you want to add the Nordic countries with lower debt and deficit, use Global X FTSE Nordic Region ETF (GXF).

A gone-fishing portfolio is supposed to be about taking life easy, but adding all these countries that should outperform the EAFE Index makes a portfolio much more complex. If you are trying to limit your holdings but still take advantage of these trends, you could drop the EAFE Index altogether and just invest in specific countries.

Perhaps a good division of your foreign asset allocation would be 30% emerging markets (VWO), 10% Canada (EWC), 30% Pacific (EPP), 10% Switzerland (EWL), 10% Nordic (GXF) and 10% small cap (VSS).

The purpose of a gone-fishing portfolio is to set an uncomplicated allocation for each asset class so you have time to visit some of these countries and enjoy the fishing. Remember, this is just about deciding on the portion allocated to foreign stocks. Set your foreign stock allocation and be sure to rebalance each year.