Source: Flickr user Paul Townsend. 

Stock market gyrations making your stomach churn these days? You're probably not alone, as the VIX, a measure of volatility in the broad-based S&P 500, has doubled over the past month.

However, panicking won't do you any good. And while sometimes it's smart to do nothing when the financial markets are in turmoil, if you are sitting on cash, there are some smart things that you can do with it. (Note: We're talking about money that isn't earmarked for an upcoming expense or dollars that should be devoted to paying off high-interest debt.)

With those parameters in mind, we had three Motley Fool analysts weigh in on the topic of what investors should do with their cash right now. Here's what they had to say. 

Amanda Alix: If you find yourself a little flush lately, you might be thinking about putting that extra cash toward your holiday shopping. If you are like many Americans, however, you would do well to put a good portion of that windfall into a fund set aside in case of an emergency.

Source: via Flickr.

Several surveys over the past few years show that Americans are ill-equipped to cover an unexpected expense totaling $1,000. Three years ago, 64% of those polled said they would have to borrow that amount, sell assets, or put off paying bills to pull together the money.

This past June, reported that more than one-quarter of persons surveyed said they have no emergency funds on hand – and two-thirds don't have enough saved to cover six months' worth of expenses, if that became necessary. published a survey this month showing that 80% of Americans have experienced a financial shock – such as not having enough cash for emergencies – and are worried that such an event could happen again. If this describes you, creating that emergency fund now will go a long way toward putting your own fears to rest.

Matthew Frankel: If you have some extra cash sitting around, one of the best things you can do with it is take advantage of stocks that are "on sale" thanks to the recent market sell-off.

Source: TheTaxHaven via Flickr.

Some companies that just reported excellent quarters are actually trading cheaper than before they announced earnings. For example, Citigroup (NYSE:C) and Goldman Sachs (NYSE:GS) are down about 7% in the past few weeks, and Bank of America (NYSE:BAC) is down by around 5%, despite all three companies beating earnings expectations. And if you're not into bank stocks, Intel (NASDAQ:INTC) also beat on both revenue and earnings, and has dropped by more than 10% in the past month.

These are just a few examples, and there are many more similar bargains created by the recent sell-off.

All of the companies listed are down due to the overall performance of the stock market, and not because anything has fundamentally declined within the businesses themselves.

One of the most surefire ways to increase your long-term investment performance is to buy shares of good companies at low prices, and the market is giving you a great opportunity to do just that.

Sean Williams: Market volatility got you on edge lately? There's a simple remedy for that: take your cash and open or contribute to a tax-advantaged retirement account such as an IRA or 401(k) plan with your employer.

Source: via Flickr.

Why am I suggesting you invest your money when the market appears so unstable? That's simple as well. Tax-advantaged retirement accounts force you to think about your retirement and put you in the mind-set of saving.

In addition, because you aren't allowed to use the profits earned in these accounts until you hit a certain qualified age they also require you to look into the horizon and pick out quality stocks that are more likely to survive the bruises and bumps that we get when the market has its hiccups every few years. In other words, these accounts help alleviate the worries associated with market volatility.

Which tax-advantaged plan is right for you? That's going to depend on your unique financial situation, but young adults are likely to enjoy a Roth IRA which allows capital gains to grow completely tax-free as long as you don't make any unqualified withdrawals. For employees of companies that offer a matching 401(k) contribution, it's a good idea to at least contribute enough that you're getting every free dollar that your employer is handing out.

Matthew Frankel owns shares of Bank of America and Intel. Sean Williams owns shares of Bank of America. Amanda Alix has no material interest in any companies mentioned in this article. 

The Motley Fool owns shares of, and recommends Bank of America and Intel. It also owns shares of Citigroup, and recommends Goldman Sachs. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.